With all the hubbub over the fiscal cliff and the bombastic rhetoric coming from the White House and Capitol Hill, many investors are wondering what it all means to them, and what they can do to blunt the potential blow.

That has financial advisers, accountants, and tax attorneys especially busy heading into 2013.

John Hills, a certified public accountant and managing principal at Spilman Hills & Heidebrink in Toledo, said he’s taking lots of calls from people seeking answers. Trouble is, there really aren’t any absolutes.

“It makes it very difficult to plan with the uncertainty,” he said. “When there’s certainty everybody can deal with what they should do. Attempting to create a plan when you don’t even know what the new law is going to be is quite a challenge.”

The fiscal cliff is a package of tax hikes and spending cuts put together in 2011 that will automatically go into effect unless Congress and the president can agree to a different deal before the end of the year.

Although most financial planners that The Blade talked to caution against knee-jerk changes to solid investment strategies guided only by tax concerns, the effects of the government careering over the cliff are very real and indiscriminate.

“There are larger implications for wealthy people, but there are implications across the board,” said Jennifer Scroggs, a vice president and senior trust officer at Fifth Third Bank.

Should Congress do nothing, the nonpartisan Tax Policy Center says taxes will increase for 90 percent of Americans, going up on average $3,500 per household next year. Middle-income households would see taxes go up nearly $2,000.

The bad news for much of the middle class is that if tax rates do go up — something both Republicans and Democrats say they don’t want to happen, but as of yet have taken no action to prevent — there’s little people can do to plan for it.

Among the changes that would hit the middle class are a rollback of the Bush-era tax cuts and the end of a 2 percent cut in the payroll tax rate. For someone who earns $50,000 a year, the payroll tax hike alone would mean an extra $1,000 a year.

While that’s something people should certainly be aware of, trying to find a way out of that will do no good.

“Worry about things you can control and this one is beyond the middle class' control,” Mr. Hills said. “They’re going to be presented with whatever Congress decides.”

The two most common questions he's been hearing are: should I convert a regular IRA to a Roth IRA, and should I harvest capital gains this year?

So, what's his answer?

Mr. Hills lets out what sounds like something between a chuckle and a sigh.

“They’re not easy answers," he said. "You have a choice of perhaps paying lower rates of tax now versus deferring taxes into the future, and it’s a difficult decision. My personal bias is that I prefer to defer taxes into the future because we don’t know what the rates will be in the future. We know they might go up next year. We don’t know for sure that they’re going up."

For investors and higher-wealth individuals, there are plenty more questions without good answers.

The rate for capital gains and dividends, currently set at 15 percent, are both slated to go up as part of the fiscal cliff package. That's why Mr. Ferris' client was considering selling before Dec. 31.

But as he told her, there is no guarantee of where the rates will end up — or even that they will go up. To that end, he compares the fiscal cliff deliberations to the Y2K panic at the end of the 1990s. And just as Mr. Ferris wasn’t stocking up on canned meat back then, he isn’t ready to significantly alter investments based on potential tax changes.

“I refuse to make massive changes in my personal portfolio or my client’s portfolio based on what these guys might or might not do in Washington,” Mr. Ferris said.

Chris Cooper, of Chris Cooper and Co. in Toledo, takes a similar approach. It’s an issue of "not letting the tax tail wag the dog."

“We can always pay no taxes by making no money," Mr. Cooper said. "That doesn’t make any sense, but we can."

Instead, investors should do their homework, crunch the numbers, and talk to their advisers to make decisions that are educated, not panicked.

However, financial advisers do say investors who are considering selling stock holdings anyway might want to do it now to get the sure rate rather than whatever Congress ultimately sets. Large accounts that have professional managers should be looking at matching losses with gains. Those worried about taxes going up on dividends could consider more growth stocks, or look toward tax exempt bonds. Investors could also consider Roth IRAs.

But none of that advice is revolutionary.

“You should have been doing these anyway whether the fiscal cliff occurs or not," Mr. Cooper said. "Really it’s still the old advice. The dance hasn’t changed. It’s just the tune’s different.”

Still, the current year’s tax rules could provide some opportunities for people.

With expectations that both the estate tax and gift tax exemptions will drop considerably next year, 2012 presents a good time to pass on a legacy to children or grandchildren.

“This is a great year to take advantage of a really high gift exemption, which is $5 million. It’s the highest we’ve ever seen and it’s likely to revert,” Fifth Third’s Ms. Scroggs said. “If they’re in a comfortable position to pass some to the next generation, they’re in a great place to do that.”

The exemption could also present an opportunity for someone to pass on a business. Ms. Scroggs said she’s seeing many clients looking into that possibility.

Of course, no one outside of Washington — and possibly no one inside it, either — knows what’s going to happen.

“Right now I’m not overly optimistic that we’re going to get a full solution,” said Bruce Merrell, a financial planner with United Advisors in Sylvania Township. “Trying to guess what’s going to happen in Washington is sort of like looking at tea leaves.”

One of his biggest concerns is over the alternative minimum tax.

The alternative minimum tax was passed years ago to ensure wealthy people aren’t able to exploit loopholes and deductions to escape taxes altogether. But it isn’t indexed for inflation, so Congress has regularly passed a “patch” to keep middle-class Americans from being swept into it and higher tax rates.

But Congress hasn’t done that for next year. Mr. Merrell said that means as many as 31 million people might have to pay it, as opposed to some four million if a patch were passed.

“That could mean thousands of dollars of additional tax for people whose income is no different than it’s been for the last couple of years,” Mr. Merrell said.

But that's something else completely out of taxpayers hands.

So perhaps the best advice is the same advice financial advisers would give in any year. Do a written financial analysis. Take stock of investment accounts, evaluate retirement plans, look at business prospects for the coming year, consider estate planning and insurance.

“The average person is probably not able to control what’s going to happen. Is their payroll going to get further taxed, are their rates going to go up? There’s not much they can do about that," said Marsha Manahan, a vice president and manager of personal trust at Fifth Third Bank. "It’s people in the investment area, people who have enough assets to have some substantial investments, they should talk to someone by the end of the year. They really should.”

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.

Copyright 2016 The Blade. All rights reserved. This material may not be copied or distributed without permission.